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Many workers are now being forced to save towards their retirement through defined contribution pensions, after the majority of employers closed their more generous final salary schemes to new members.

Final salary schemes guarantee how much a member's pension will be worth when they retire based on how many years they have belonged to the scheme and what their pension was before they gave up work.

But under defined contribution schemes, employers only guarantee how much they will pay into the schemes.

This means individual workers shoulder the risk of stock market falls and increased life expectancy.

Helen Dowsey, principal in the benefit solutions division of Aon Consulting, urged people with defined contribution pensions not to panic.

She said: 'It may appear a double blow to workers that not only are they facing more of a struggle to make ends meet, but the economic turmoil is also seemingly eating into the money they have been putting aside for retirement.

'However, most workers will have the fortune of time on their side as their retirement will be many years away, enough time to weather the current storm.

'For those nearing retirement, it will be even more essential to seek professional advice on all the options available to them and how to get the most from their pension.'

She said that while many people nearing retirement may be tempted to move their pension savings out of shares and into cash, doing this would only consolidate their losses.

She added some people may be better off delaying their retirement instead.

The average pension pot from a defined contribution scheme is just over £25,000, which would buy an annual retirement income of around £1,960 for a single man aged 65 who did not opt for a pension that rises in line with inflation.

But if the pension pot was 28 per cent per cent below this level at £18,000, it would buy an annual income of just £1,400 on the same basis.